§ Mr. Les Huckfieldasked the Secretary of State for Defence whether he will make a statement on the lifting of the moratorium on defence spending as it affects current work and future contracts undertaken by British Aerospace factories; and whether he has any proposals for future restraints on such spending either through cash limits, moratoria or other devices.
§ Mr. PymThe three-month moratorium on new defence contracts ended on 8 November. As I announced in the House on 3 November—[Vol. 991, c.475–76]—the pressures on the defence budget are expected to continue until the end of the financial year and the need for a stringent discipline on new contracts must, therefore, remain. Although new contracts will be placed, inevitably these will be fewer during the remainder of the year than would normally be the case. The placing of new contracts will need to take account of operational, industrial and financial implications. It is, however, too early to say how individual firms will be affected by these new arrangements, but my Department is, of course, in close touch with industry, and is ready to discuss the detailed application of the new regime with individual firms.